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Stifel Financial Corporation : Auction Rate Securities Summary: The original complaint alleges that Stifel Financial Corp. and its subsidiary Stifel, Nicolaus & Company, Inc. violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction-rate securities and the auction market in which the securities are traded. Auction-rate securities are municipal or corporate debt securities or preferred stocks that pay interest at rates set through periodic auctions. The instruments typically have long-term maturity dates or no maturity date.
The suit, filed on August 8, claims that, pursuant to uniform sales materials and top-down management directives, Stifel Financial Corp. offered and sold auction-rate securities to the public as highly liquid cash-management instruments and as suitable alternatives to money market mutual funds. On Feb. 13, 2008, all of the major broker-dealers, including Stifel Financial Corp., withdrew their support for the auctions. The suit claims that, as a result, investors have been unable to liquidate their auction-rate securities.
The lawsuit alleges that Stifel Financial Corp. failed to disclose the following material facts about the auction-rate securities it sold to the class: 1) The auction-rate securities were not cash alternatives like money market funds but were instead complex long-term financial instruments with 30-year maturity dates; 2) The auction-rate securities were only liquid at the time of the sale because Stifel Financial Corp and other broker-dealers were artificially supporting and manipulating the market to maintain the appearance of liquidity and stability; 3) Stifel Financial Corp and other broker-dealers routinely intervened in the auctions for their own benefit to set rates and to prevent all-hold auctions and failed auctions, and; 4) Stifel Financial Corp. continued to market auction-rate securities as liquid investments even after Stifel Financial Corp. and other broker-dealers determined that they would likely be withdrawing support for the periodic auctions and that a freeze of the auction rate securities market would result.
On November 17, 2008, the Court appointed The Stifel Group as Lead Plaintiff and approved their selection of Carey & Danis, LLC and Stueve Siegel Hanson, LLP as Co-Lead Counsel. On January 9, 2009, the lead plaintiffs filed a First Amended Class Action Complaint. On March 10, 2009, the defendants responded by filing a motion to dismiss the First Amended Class Action Complaint. On November 16, 2009, the lead plaintiff filed a Second Amended Class Action Complaint. The pending motion to dismiss the First Amended Class Action Complaint has been denied as moot.
INDUSTRY CLASSIFICATION:
SIC Code: 6211
Sector: Financial
Industry: Investment Services
| COMPANY/ISSUER NAME: | Stifel Financial Corporation |
| COMPANY/ISSUER TICKER: | SF |
| COMPANY WEBSITE: | http://www.stifel.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Joseph A. Merrick, et al. v. Stifel Financial Corporation, et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Petition For Violations Of Federal Securities Laws | |||
| Type: Complaint | Date on the document: 8/8/2008 | ||
| Notice Of Motion Of Plaintiff Joseph A. Merrick For Appointment Of Joseph A. Merrick And Steven H. Schiding As Lead Plaintiffs, And Approval Of Selection Of Counsel | |||
| Type: Notice | Date on the document: 10/14/2008 | ||
| Order Appointing The Stifel Group As Lead Plaintiff And Approving Lead Plaintiff's Selection Of Counsel | |||
| Type: Order Appointing LP/LC | Date on the document: 11/17/2008 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| Joseph A. Merrick, et al. v. Stifel Financial Corporation, et al. | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| First Amended Class Action Complaint For Violation Of The Federal Securities Laws | |||
| Type: Complaint | Date on the document: 01/09/2009 | ||
| Second Amended Class Action Complaint For Violation of the Federal Securities Laws | |||
| Type: Complaint | Date on the document: 11/16/2009 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 11/18/2009 | ||
| OTHER DOCUMENTS | |||
| Case Name and/or Number: | |||
| Type: | Date on the document: | ||
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